top of page
Search

20/10/23 Briefing


The S&P 500 futures are down 9 points and are trading 0.2% below fair value. The Nasdaq 100 futures are down 39 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 69 points and are trading 0.2% below fair value.

Equity futures indicate a lower open after the 10-yr note yield crossed 5.0% for the first time since 2007 overnight. It has since declined to 4.93%. The 2-yr note yield is down three basis points to 5.14%. Market participants are also digesting another slate earnings news, headlined by Dow component American Express (AXP), which beat earnings estimates and reaffirmed FY23 guidance.

Geopolitical uncertainty remains top of mind for investors. In a speech last night, President Biden, citing national security interests, made the case for more aid for Israel and Ukraine. Reports suggest he will ask Congress for approximately $100 billion in emergency aid. The business of Congress, however, remains stymied by the House's inability to elect a new Speaker.

The geopolitical uncertainty, particularly the Israel-Hamas conflict, has contributed to risk aversion ahead of the weekend.

The People's Bank of China left its one- and five-year loan prime rates at their respective 3.45% and 4.20%, as expected. 

In corporate news:

  • American Express (AXP 149.25, -0.37, -0.3%): beats by $0.35, reports revs in-line; reaffirms FY23 guidance; sees FY24 revenue growth in excess of 10%; sees mid teens EPS growth

  • CSX (CSX 30.25, -0.29, -1.0%): misses by $0.01, reports revs in-line; expects improving sequential trends in select key end markets in Q4

  • SolarEdge Technologies (SEDG 80.96, -33.02, -29.0%): slashes its Q3 revenue outlook due to substantial unexpected cancellations and pushouts of existing backlog from European distributors; downgraded by Deutsche Bank to Hold from Buy along with Sunnova Energy (NOVA) and Sunrun (RUN)

  • SLB (SLB 58.80, -1.17, -2.0%): beats by $0.01, reports revs in-line

  • Intuitive Surgical (ISRG 255.50, -17.95, -6.6%):  beats by $0.04, misses on revs

  • Hewlett Packard Enterprise (HPE 15.60, -0.70, -4.3%): guided FY23 EPS inline and FY24 guidance below consensus earlier today at its Securities Analyst Meeting; also provided its long-term financial model, including revenue growth of 2-4% for FY24-FY26

  • Knight-Swift (KNX 51.40, +5.52, +12.0%): beats by $0.05, beats on revs; guides FY23 EPS above consensus

  • General Motors (GM 29.55, +0.22, +0.8%): and UAW are moving toward tentative deal, according to Bloomberg

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a lower note. Japan's Nikkei: -0.5% (-3.3% for the week), Hong Kong's Hang Seng: -0.7% (-3.6% for the week), China's Shanghai Composite: -0.7% (-3.4% for the week), India's Sensex: -0.4% (-1.3% for the week), South Korea's Kospi: -1.7% (-3.3% for the week), Australia's ASX All Ordinaries: -1.2% (-2.1% for the week).

  • In economic data:

  • China's September FDI -8.4% (last -5.1%) o Japan's September National CPI 0.3% m/m (last 0.2%); 3.0% yr/yr (last 3.2%). National Core CPI 2.8% yr/yr (expected 2.7%; last 3.1%)

  • Hong Kong's September CPI 0.4% m/m (last 0.0%); 2.0% yr/yr (expected 1.8%; last 1.8%)

  • New Zealand's September trade deficit NZD2.329 bln (last deficit of NZD2.273 bln). September Credit Card Spending 3.3% yr/yr (last 4.3%)

  • In news:

  • Japan's Core CPI was up 2.8% in September, representing the first reading below the 3.0% yr/yr mark since August 2022.

  • The Bank of Japan announced that a fund-supplying operation will be conducted on Tuesday after the JGB 10-yr yield reached a level not seen in more than a decade.

  • The People's Bank of China left its one- and five-year loan prime rates at their respective 3.45% and 4.20%, as expected.

  • Troubled developer Evergrande revised the terms of its proposed restructuring.

  • China's Commerce Ministry announced that rules for exporting graphite items will be adjusted.

  • The Reserve Bank of New Zealand's Credit Conditions survey for September showed that demand for credit decreased in a broad-based manner over the past six months.

  • Major European indices are on track for a lower finish to the week. STOXX Europe 600: -0.9% (-3.0% week-to-date), Germany's DAX: -1.2% (-2.1% week-to-date), U.K.'s FTSE 100: -0.9% (-2.2% week-to-date), France's CAC 40: -1.1% (-2.2% week-to-date), Italy's FTSE MIB: -1.0% (-3.2% week-to-date), Spain's IBEX 35: -1.0% (-1.9% week-to-date).

  • In economic data:

  • Germany's September PPI -0.2% m/m (expected 0.4%; last 0.3%); -14.7% yr/yr (expected -14.2%; last -12.6%)

  • U.K.'s September Retail Sales -0.9% m/m (expected -0.2%; last 0.4%); -1.0% yr/yr (expected -0.1%; last -1.3%). September Core Retail Sales -1.0% m/m (expected -0.4%; last 0.6%); -1.2% yr/yr (expected -0.2%; last -1.3%). September Public Sector Net Borrowing GBP13.53 bln (expected GBP17.60 bln; last GBP10.58 bln)

  • In news:

  • Bank of England Governor Baily said that inflation is expected to show a marked slowdown in November with more gradual decreases to follow.

  • The U.K. reported a larger than expected decrease in September Retail Sales due in part to warm weather weighing on apparel sales.

  • InterContinental Hotel Group said that it expects a very strong end to the year.

 

U.S. equity futures:

  • S&P 500 Futures -9 @ 4,269

  • DJIA Futures: -81 @ 33,333

  • Nasdaq 100 Futures: -42 @ 14,741

Overseas:

  • Europe: DAX -1.2%, FTSE -0.9%, CAC -1.1%

  • Asia: Nikkei -0.5%, Hang Seng -0.7%, Shanghai Composite -0.7%

Commodities:

  • Crude Oil +1.18 @ 89.55

  • Nat Gas -0.003 @ 2.954

  • Gold +8.10 @ 1988.60

  • Silver +0.219 @ 23.250

  • Copper -0.0353 @ 3.5657

Earnings/Guidance:

  • Amerant Bancorp (AMTB) misses by $0.05, beats on revs

  • American Express (AXP) beats by $0.35, reports revs in-line; sees FY24 revenue growth in excess of 10%; sees mid teens EPS growth, reaffirms FY23 guidance

  • Aspen Tech (AZPN) reiterated its FY24 (Jun) guidance

  • Assoc Banc-Corp (ASB) beats by $0.01; sees FY23 loan growth of +5-6% versus +4-6% prior; sees FY23 NII of +5-7% versus +6-8% prior

  • Autoliv (ALV) misses by $0.13, reports revs in-line

  • Bank OZK (OZK) beats by $0.07, net interest income increased 24.7% yr/yr

  • Berkshire Hills Bancorp (BHLB) beats by $0.01

  • BioLife Solutions (BLFS) appoints Roderick de Greef as Chairman and CEO; guides Q3 revs above consensus; expects FY23 revs at low-end of prior outlook

  • Buenaventura (BVN) Announces Third Quarter 2023 Results for Production and Volume Sold per Metal

  • Comerica (CMA) beats by $0.15

  • CSX (CSX) misses by $0.01, reports revs in-line

  • Euronet (EEFT) beats by $0.02, beats on revs; guides Q4 EPS above consensus

  • First Bancorp (FBP) beats by $0.08

  • First Financial (FFIN) misses by $0.01

  • Glacier Bancorp (GBCI) beats by $0.05

  • Hewlett Packard Enterprise (HPE) guided FY23 EPS inline and FY24 guidance below consensus earlier today at its Securities Analyst Meeting; also provided its long-term financial model, including revenue growth of 2-4% for FY24-FY26

  • Hilltop Holdings (HTH) beats by $0.03

  • Huntington Banc (HBAN) beats by $0.04

  • Intercontinental Hotels Group (IHG) reports Q3 trading update; RevPar +10.5% yr/yr

  • Interpublic (IPG) misses by $0.03, beats on revs

  • Intuitive Surgical (ISRG) beats by $0.04, misses on revs; provides FY23 procedure guidance on earnings call

  • Knight-Swift (KNX) beats by $0.05, beats on revs; guides FY23 EPS above consensus

  • Regions Fincl (RF) reports Q3 (Sep) results, misses on revs

  • Semtech (SMTC) reaffirms Q3 guidance and prices $250 mln of 4.00% convertible senior notes due 2028

  • Sensient (SXT) reports EPS in-line, misses on revs

  • SLB (SLB) beats by $0.01, reports revs in-line

  • SolarEdge Technologies (SEDG) slashes its Q3 revenue outlook due to substantial unexpected cancellations and pushouts of existing backlog from European distributors

  • WD-40 (WDFC) reports EPS in-line (two estimates), beats on revs; guides FY24 EPS below two analyst estimate, revs above two analyst estimate

  • Western Alliance Bancorp (WAL) beats by $0.06, beats on revs; sees Q4 NIM of 3.6-3.7%; loans $0-300 mln

News:

  • Rep. Jim Jordan vows to stay in the race for Speaker of the House despite growing Republican opposition, according to CNN

  • President Biden asked Congress for additional funding to support Ukraine and Israel

  • The U.S. and European Union stall regarding an accord on steel and aluminum, to keep negotiating until a year-end deadline, according to Bloomberg

  • New York Attorney General James sues cryptocurrency companies Gemini, Genesis, and DCG for defrauding investors

  • Drug companies testing weight loss drugs for kids as young as six, according to Bloomberg

  • SAG-AFTRA TV/Theatrical negotiating issues committee message to membership

  • AbbVie (ABBV): UK MHRA authorises monoclonal antibody therapy Tepkinly as a treatment for diffuse large B-cell lymphoma in adults

  • AEON Biopharma (AEON) Announces Topline Results from Phase 2 Trial of ABP-450 (prabotulinumtoxinA) for the Preventive Treatment of Episodic Migraine

  • Alibaba (BABA): New artificial intelligence chip rules might impact Alibaba and Baidu (BIDU), according to Financial Times

  • Apple (AAPL) CEO Tim Cook visited China, according to the Wall Street Journal

  • Aspen Tech's (AZPN) CFO to step down to pursue another opportunity; SVP and Chief Accounting Office will assume role of interim CFO, effective January 1, 2024

  • BeiGene (BGNE) receives positive recommendation from NICE in U.K. for adult patients with chronic lymphocytic leukemia

  • Bowlero (BOWL) completes $432.9 mln sale-leaseback transaction with VICI Properties; transferring land and real estate assets of 38 Bowling Entertainment Centers

  • Credit Suisse (CS) preparing additional job cuts, according to Financial News

  • CVS Health (CVS) voluntarily pulling some cold medicines from Kenvue (KVUE) from store shelves, according to CNBC

  • Deutsche Bank (DB) and ING (ING) might be impacted by additional reserve requirements, according to Bloomberg

  • DISH Network (DISH) amends previously disclosed spectrum purchase agreement with T-Mobile US (TMUS)

  • Eli Lilly (LLY) files complaint before the U.S. International Trade Commission to stop companies from distributing tirzepatide, the active ingredient in Mounjaro

  • Eli Lilly (LLY): Nearly 80% of patients with moderate-to-severe atopic dermatitis maintained clear or almost clear skin with Lilly's lebrikizumab monthly maintenance dosing at two years

  • Fluor (FLR) subsidiary Stork UK secures three-year contract with Sellafield Ltd for its nuclear site in the U.K.

  • General Motors (GM) and UAW are moving toward tentative deal, according to Bloomberg

  • Gilead Sciences (GILD) reports new data presented at EACS 2023 further demonstrate strong clinical profile of twice-yearly Sunlenca for adults with Multi-Drug Resistant HIV

  • Ginkgo Bioworks (DNA) enters into MoU with Govt of Serbia with the intent of collaborating in support of Serbia's bioeconomy vision

  • Leidos (LDOS) awarded $180 mln Defense Health Agency virtual health task order

  • Leidos (LDOS): U.S. Defense Health Agency selects Amwell (AMWL) and Leidos to power the Digital First initiative for the U.S. Military Health System

  • Macatawa Bank Corporation (MCBC) CEO Ronald Haan to retire, effective November 1; succeeded by CFO Jon Swets, who will then be replaced by Bryan Barker

  • Matador Resources (MTDR) increases quarterly cash dividend 33% to $0.20/share from $0.15/share

  • Merck (MRK) and Daiichi Sankyo announce global development and commercialization collaboration for three Daiichi Sankyo DXd ADCs

  • Metropolitan Bank (MCB) reaches settlement with the Federal Reserve and New York State Department of Financial Services

  • Moderna (MRNA): UK issues Regulatory approval of Spikevax bivalent Original/Omicron booster vaccines

  • Novartis AG (NVS) Kisqali NATALEE analysis reinforces consistent reduction in risk of recurrence across key subgroups of patients with early breast cancer

  • Rio Tinto (RIO) and Yindjibarndi Energy sign Pilbara renewables MOU

  • RumbleOn (RMBL) appoints Michael Kennedy as Chief Executive Officer

  • Simpson Manufacturing (SSD) contains previously announced cybersecurity incident; does not expect a material impact to financials

  • SNDL Inc. (SNDL) streamlines cannabis operations footprint to enhance competitiveness and profitability

  • Stellantis (STLA): Due to UAW strike actions, Stellantis announces 100 more layoffs at the Toledo machining plant

  • Toyota Motor (TM) reported on its website that it has reached an agreement with Tesla (TSLA) to adopt the North American Charging Standard on its BEVs beginning in 2025

  • WeWork (WE) COO Anthony Yazbeck to depart, effective October 20

M&A:

  • AG Mortgage Investment Trust (MITT) and Western Asset Mortgage Capital Corporation (WMC) Announced Final Exchange Ratio for Proposed Merger

  • Banc of California (BANC) receives final regulatory approval for its merger with PacWest Bancorp (PACW)

  • Jazz Pharma (JAZZ) considering options including a sale, according to Bloomberg

  • Masonite International (DOOR) announces that its U.S subsidiary has acquired Fleetwood Aluminum Products, LLC , for $285 mln in cash

  • NiSource (NI) announces Federal Energy Regulatory Commission approval of sale of 19.9% equity interest in NIPSCO

  • Perficient (PRFT) to acquire SMEDIX

  • Talaris Therapeutics (TALS): Tourmaline Bio closes merger with Talaris Therapeutics and concurrent private placement of $75 million

  • Western Digital (WDC): Kioxia Holdings looking to support WDC with capital infusion for merger, according to Bloomberg

Syndicate:

  • Arcutis Biotherapeutics (ARQT) announces proposed public offering of $100 mln common stocks

IPOs:

  • No IPOs expected to price.

Gapping Up/Down

  • Gapping up:

  • KNX +17.8%, BOWL +12.6%, MCB +4.9%, BLX +4.1%, WE +2.9%, PACW +2.5%, WAL+2.1%, DOOR +2%, ASB +2%, AEON +1.9%, DNA +1.3%, LDOS +1.2%, RF +1.2%

  • Gapping down:

  • SEDG -26%, ARQT -18.5%, ENPH -15.1%, SPWR -8.4%, RUN -7.8%, ISRG -7.8%, CSIQ-5.8%, FSLR -5.2%, MAXN -4.4%, WDFC-4.4%, HPE -4.3%, JKS -4.1%, STLD -3.2%, IHG -2.9%, FLR -2.6%, NI -2.4%, ENOV-1.9%, SNDL -1.3%, STLA -1.3%, AZPN-0.8%, CSX -0.8%, X -0.7%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Alvotech (ALVO) upgraded to Neutral from Sell at Citigroup; tgt raised to $10

  • Cognizant Tech (CTSH) upgraded to Buy from Neutral at Citigroup; tgt raised to $80

  • Downgrades:

  • Beam Therapeutics (BEAM) downgraded to Market Perform from Outperform at Leerink Partners; tgt lowered to $20

  • CNH Industrial (CNHI) downgraded to Perform from Outperform at Oppenheimer

  • Columbia Sportswear (COLM) downgraded to Neutral from Buy at Seaport Research Partners

  • Others:

  • Agilon Health (AGL) initiated with a Buy at The Benchmark Company; tgt $28

  • Hasbro (HAS) initiated with a Neutral at Citigroup; tgt $62

  • Invesco Mortgage Capital (IVR) initiated with a Neutral at BTIG Research

  • Mattel (MAT) initiated with a Buy at Citigroup; tgt $26

Econ Data:

  • 14:00 ET: Treasury Budget for Sep (Briefing.comConsensus NA; Prior $89.2B)

Earnings:

  • Monday (Oct 16)

  • Morning:  SCHW

  • Afternoon: ELS

  • Tuesday (Oct 17)

  • Morning: ACI BAC BK ERIC GS JNJ LMT PLD

  • Afternoon:  FULT HWC IBKR JBHT OMC PNFP UAL WTFC

  • Wednesday (Oct 18)

  • Morning:  ABT ALLY ASML CFG CBSH ELV FHM MTB MS NDAQ NTRS PG STT SCL TRV USB UNF UCBI WGO

  • Afternoon:  AA CNS COLB CCI DFS EFX FNB FR KMI LRCX LVS LBRT MRTN NFLX PPG REXR SAP SLG STLD SNV TSLA ZION

  • Thursday (Oct 19)

  • Morning: ALK AAL T AUB BMI BKU BX EWBC FITB FCX GPC HOMB IRDM KEY LNN MAN MMC NOK PM POOL SNA TSM TCBI TFC UNP WBS WNS

  • Afternoon:  ASB OZK CSX GBCI ISRG KNX WDFC

  • Friday (Oct 20)  

  • Morning:  AXP ALV BHLB CMA EEFT FBP HBAN IPG RF SXT SLB

  • Afternoon:  HTH

 

Asia & Europe detail:

Asia: Nikkei -0.5%, Hang Seng -0.7%, Shanghai Composite -0.7%

Equity indices in the Asia-Pacific region ended the week on a lower note. Japan's Core CPI was up 2.8% in September, representing the first reading below the 3.0% yr/yr mark since August 2022. The Bank of Japan announced that a fund-supplying operation will be conducted on Tuesday after the JGB 10-yr yield reached a level not seen in more than a decade. The People's Bank of China left its one- and five-year loan prime rates at their respective 3.45% and 4.20%, as expected. Troubled developer Evergrande revised the terms of its proposed restructuring. China's Commerce Ministry announced that rules for exporting graphite items will be adjusted. The Reserve Bank of New Zealand's Credit Conditions survey for September showed that demand for credit decreased in a broad-based manner over the past six months.

  • In economic data:

  • China's September FDI -8.4% (last -5.1%) o Japan's September National CPI 0.3% m/m (last 0.2%); 3.0% yr/yr (last 3.2%). National Core CPI 2.8% yr/yr (expected 2.7%; last 3.1%)

  • Hong Kong's September CPI 0.4% m/m (last 0.0%); 2.0% yr/yr (expected 1.8%; last 1.8%)

  • New Zealand's September trade deficit NZD2.329 bln (last deficit of NZD2.273 bln). September Credit Card Spending 3.3% yr/yr (last 4.3%)

---Equity Markets---

  • Japan's Nikkei: -0.5% (-3.3% for the week)

  • Hong Kong's Hang Seng: -0.7% (-3.6% for the week)

  • China's Shanghai Composite: -0.7% (-3.4% for the week)

  • India's Sensex: -0.4% (-1.3% for the week)

  • South Korea's Kospi: -1.7% (-3.3% for the week)

  • Australia's ASX All Ordinaries: -1.2% (-2.1%for the week)

---FX---

  • USD/JPY: +0.1% to 149.94

  • USD/CNH: UNCH at 7.3329

  • USD/INR: UNCH at 83.06

 

Europe: DAX -1.2%, FTSE -0.9%, CAC -1.1%

Major European indices are on track for a lower finish to the week. Bank of England Governor Baily said that inflation is expected to show a marked slowdown in November with more gradual decreases to follow. The U.K. reported a larger than expected decrease in September Retail Sales due in part to warm weather weighing on apparel sales. InterContinental Hotel Group said that it expects a very strong end to the year.

  • In economic data:

  • Germany's September PPI -0.2% m/m (expected 0.4%; last 0.3%); -14.7% yr/yr (expected -14.2%; last -12.6%)

  • U.K.'s September Retail Sales -0.9% m/m (expected -0.2%; last 0.4%); -1.0% yr/yr (expected -0.1%; last -1.3%). September Core Retail Sales -1.0% m/m (expected -0.4%; last 0.6%); -1.2% yr/yr (expected -0.2%; last -1.3%). September Public Sector Net Borrowing GBP13.53 bln (expected GBP17.60 bln; last GBP10.58 bln)

---Equity Markets---

  • STOXX Europe 600: -0.9% (-3.0% week-to-date)

  • Germany's DAX: -1.2% (-2.1% week-to-date)

  • U.K.'s FTSE 100: -0.9% (-2.2% week-to-date) 

  • France's CAC 40: -1.1% (-2.2% week-to-date)

  • Italy's FTSE MIB: -1.0% (-3.2% week-to-date)

  • Spain's IBEX 35: -1.0% (-1.9% week-to-date)

---FX---

  • EUR/USD: +0.1% to 1.0589

  • GBP/USD: UNCH at 1.2138

  • USD/CHF: UNCH at 0.8912

1 view0 comments

Recent Posts

See All

Commenti


bottom of page